Answer:
C. Separation of legal ownership and management control.
Step-by-step explanation:
Public stock companies are companies owned by the shareholders, founders; managed and controlled by appointed professionals and whose shares are publicly quoted on the stock exchange.
One of the characteristics of public stock company deals with principal and agent is the principle of separation of legal ownership and management. It means that the control and management of a company is handed to professionals who are not the owners of the company. The separation will enable the prefessionals to conduct the affairs of the firm using their skills and experience.
Advantages of separation of legal ownership and management are ;
-it allows for checks and balances . The company will be able to access and check the excesses of the professionals and vice versa.
-Efficient utilization of capital. This is the duty of managers, who look for ways the firm's capital will be minimized to generate profit that will be distributed to shareholders.
-Professional skills. The appointed managers are professionals in their field thus would make use of their skills to steer the affairs of the firm.